China Eastern Airlines and European aerospace giant Airbus have agreed on a landmark deal of $15.8 billion for the procurement of 101 A320NEO aircraft, reinforcing China’s position as the world’s most strategically vital aviation market.
The NEO in A320NEO stands for New Engine Option which is a new fuel efficient version of Airbus’s best selling A320 family. It is fitted with next generation engines from CFM International and it delivers upto 20% lower fuel burn and also emits less CO₂ per seat. It has a capacity to accommodate up to 194 passengers and has a maximum range of 3,400 nautical miles which makes it suitable for both domestic and international travel.
This deal proves that China Eastern is pushing towards a major fleet renewal. The airline’s broader strategy is to retire ageing aircrafts from it’s fleet so that it can expand its passenger capacity before the upcoming travel surge. From a geopolitical standpoint the timing of the deal is also very crucial as Airbus had already expanded its market share in China up to 55% overtaking it’s competitor Boeing.
The CEO of Airbus Guillaume Faury has given his observations that over the next two decades China will require roughly 9,500 new aircraft which is one-fifth of the total global demand. As production slots are becoming increasingly less, China Eastern’s move signals that it has strong confidence in the growth of the aviation market and it wants to cement Airbus’s dominance in its skies.